U.S. Easing Exports to China, Seeks Textiles Restraint

Commerce Secretary Malcolm Baldrige said Friday that Washington will further ease restrictions on sales of U.S. technology to China, but he warned that China must limit its textile exports to the United States.

Winding up a four-day visit, Baldrige flew to Hong Kong, where he will meet Monday with Hong Kong officials and U.S. businessmen.

Baldrige said he told Premier Zhao Ziyang and other officials in Beijing that Washington is paying “special attention” to the transfer of high-technology products to China.

China has repeatedly complained about strict U.S. controls and delays in technology transfers.

“The changes in our export control policies toward China have been particularly rapid in the last two years, and I have directed that steps be taken to improve the mechanism for reviewing disputed cases within the U.S. government,” Baldrige said.

He said that Washington also intends to expand the “green zone” range of high-technology items that can be sold to China without official approval.

“We would expect to see some significant improvements in the size of the green zone this year,” Baldrige said. “That covers 30 different product categories. When we first started, it only covered about six.”

Baldrige said the United States has become China’s largest textiles market, but that such sales cannot continue “growing by leaps and bounds.”

“We recognize that the textile trade is China’s major foreign exchange earner and is therefore an extremely important issue to China,” he said. “China’s textile and apparel exports to the United States grew 65% in 1986. This growth is simply not sustainable.”

Baldrige skirted a question about what volume of textiles from China would be acceptable. He said that a new round of textile talks between the two countries is to begin next month.

He urged Beijing to improve the investment climate in China, where foreign businessmen complain of high prices, low profits, red tape and lack of access to the market.

“China’s current share of American foreign investment in the East Asian region is less than 1%, and it should be more than that,” Baldrige said.

Baldrige and his Chinese counterpart, Zheng Tuobin, signed five agreements involving aviation, electronics and telecommunications and two trade and development grants.